Staying healthy would be a heck of a lot easier if all you had to do was follow a healthy diet and go to the gym. Unfortunately, neither of these will be of much help if you get into an accident, become injured, or develop a serious health condition.
That’s why over 84% of Americans will visit a doctor at least once each year.
But the issue in America isn’t exactly a physical lack of access to healthcare – though this is still a problem for a small portion of the population. The major issue is the insane cost of healthcare that leaves people wondering, “Do I really need to see a doctor for this?”
It’s a huge problem when Americans have to weigh paying their car insurance or visiting a doctor for health concerns in the year 2020.
But just how much are Americans spending on healthcare and where is the money actually going? Let’s find out with these 27 surprising healthcare spending statistics and trends.
Table of Contents
- Spending on Physicians and Clinical Services
- Hospital Expenditures
- Private Health Insurance Spending
- Out of Pocket Healthcare Spending
- Prescription Drug Spending
Spending on Physicians and Clinical Services
- In 2018, Americans spent $725.6 billion on physician and clinical services – up 4.1% in 2018 and 4.7% in 2017.
- In 2017, spending on services like podiatry, physical therapy, and chiropractic medicine approached $96.6 billion – up 4.6% in 2017 and 5.1% in 2016.
- The average American will visit a doctor only 4 times per year, which is significantly lower than Japan’s average of 12.9 visits per year.
- The average salary for a general practitioner in America is about $185,000 while surgeons earn a staggering $306,000 a year.
- According to the Association of American Medical Colleges, an increasing population and a larger senior community could lead to a physician shortage of 121,300 in the next 10 years.
This group of statistics is actually a bit surprising. Based on the amount of money that Americans are shelling out to visit physicians, you’d expect people to be going to the doctor much more than 4 times per year.
But that all comes down to the business aspect of medicine.
As seen in the statistics, there’s actually a growing shortage of physicians and doctors in America. And if you know anything about the concept of supply and demand, then you’ll understand why prices are going up while the frequency of services isn’t as well.
The lower availability of doctors justifies the increase in price. Because of that, medical care in America is seen as a luxury for the wealthy.
Yet, what’s also interesting about the doctor shortage is that it’s in part due to a growing senior population. That implies that Americans are rarely going to the doctor, but actually seem to be living longer than ever before.
Unfortunately, the healthcare industry in America seems to be centered around revenue instead of the general well-being of American citizens.
- In 2018, hospital expenditures in America reached $1,191.8 billion – up 4.5% in 2018 and 4.7% in 2017.
- Administrative costs of hospitals make up about 25% of total hospital expenses.
- In 2015, American hospitals billed patients 3 ½ times more than what the hospitals ended up receiving in payment.
- Private insurance companies tend to pay a larger percentage of a hospital bill as compared to Medicaid and Medicare, a trend that has continued since 2000.
- Hospitals often receive greater payments from private insurance companies to guarantee revenues each year.
- Those with private insurance have seen a near 60% increase in hospital costs since 2008 while Medicaid and Medicare participants have not seen an increase.
- A good percentage of hospital revenue goes to CEOs and administrators – insurance CEOs earn about $584,000, hospital administrators take home about $237,000, and hospital CEOs pocket nearly $386,000.
In the ideal world, the only time you’d need to see a doctor would be for your annual checkup. But unfortunately, there’s a pretty good chance that you’ll be one of America’s 139 million annual emergency visits.
When that happens, you know what comes next. You’ll be receiving bills in the mail for what seems like months or years after your emergency room visit.
It’s to be expected, but the amount isn’t!
In the statistics above, what’s most concerning is that it looks like insurance companies and hospitals are marking up prices in order to boost their own revenue. It even seems like hospitals are charging random amounts and seeing what the average American is willing to pay.
What’s even more concerning is the fact that Americans are now spending about 60% more on hospital expenditures without even really seeing a boost in the quality of services. Now Americans are getting even less bang for their buck in situations where they don’t even have a choice.
And the more powerful people running insurance companies and hospitals are the one’s padding their wallets while lower-class Americans have to tighten their belts.
Private Health Insurance Spending
- In 2018, the amount spent on private health insurance increased to $1,243 billion – up 5.8% and accounting for about 34% of national health expenditure.
- In 2018, about 67.3% of the American population was covered by private health insurance, as compared to 34.4% enrolled in a public insurance plan – about 55.1% of insurance plans are employer-based.
- According to the Kaiser Family Foundation, about 49% of Americans have group health insurance or employer-sponsored insurance.
- 68.9% of Americans aged 18 to 64 have private insurance.
- 13.3% of Americans aged 18 to 64 are uninsured.
Though most Americans are on private health insurance plans, there’s really not much leeway in the area of saving money. There’s a good chance that you’re getting your health insurance coverage through your employer.
Yet again, this is evidence that the healthcare system in America is designed around the wealthiest citizens.
Being on a private health insurance plan means you have to keep a close eye on your premiums, deductibles, and just about every minor cost involved in your health. Every single plan also has its own guidelines in terms of fees and where you can receive coverage.
Plus, there are strict requirements from employers to even be eligible for such a “privilege.”
What’s most significant is just how much you might spend each and every month to maintain health insurance coverage. Individual costs can be well over $400 a month, which might end up being a waste of money if you don’t visit a doctor during the year.
You pay “just in case,” because you’ll end up out of thousands or even hundreds of thousands of dollars if you need to see a doctor or visit the emergency room without current coverage.
Out of Pocket Healthcare Spending
- In 2018, out of pocket spending cost Americans $375.6 billion – up 2.8% in 2018 and accounting for about 10% of national health expenditure.
- In 2017, Utah had the highest out of pocket healthcare expenses.
- Residents of Hawaii spend a median of $360 on out of pocket spending while Nebraska boasts a median of $1,500 – these numbers climbed in four states, with the top 10% of households spending more than $7,000 on out of pocket costs.
- In many states, between 4 and 11% of those with employer-based insurance coverage experienced high out of pocket insurance costs.
Even though you’re spending $400+ a month on health insurance coverage, that’s not the only cost associated with staying healthy. You also have to worry about out of pocket costs that aren’t covered by your insurance plan.
So you’ll have to pay for the monthly premium, the cost of prescription drugs, copays to actually see the doctor every time, and the deductible. It seems like health insurance companies make you jump through hoops to stay healthy.
Here’s why that matters.
- In some states, $400 could be nearing the cost of rent.
- A high deductible (like $1,000 or more) means shelling out a grand every time you have an expensive procedure done.
- Not all insurance plans cover prescription drugs (or at least well).
- You have to pay a copay for every visit, even if you’re just going for a quick checkup.
Now, these probably won’t be things that you have to worry about if you have a really good health insurance plan or if you’re not low on funds. But this can help to explain why so few Americans are visiting doctors during the year.
It’s far too expensive and a basic medical procedure can put you in debt. Some Americans might even be left to choose between keeping their house or getting a medical procedure done.
Prescription Drug Spending
- In 2018, spending on prescription drugs reached $335 billion – up 2.5% in 2018 and 1.4% in 2017.
- A loss of patent protection and the availability of low-cost generic drugs led to a decrease in prescription drug spending after 2012, dropping significantly between 2016 and 2017.
- 2.9 billion drugs were ordered.
- 73.9% of doctor visits were related to drug therapy.
- Between 2013 and 2016, about 48.4% of Americans used at least one prescription drug within the previous month.
- 85% of adults 60 years and older and 18% of children under 12 years old were on prescription drugs.
These statistics aren’t too surprising given the questionable relationship between some doctors and prescription drug companies. When you see the rates of doctors being arrested for prescription drug kickback schemes, you’ll understand why America is overmedicated.
In fact, there are studies that suggest nearly half of doctors in America were on the receiving end for extra money for referring patients to specific medications.
Now, why does that matter?
Well, you have to consider the fact that it’s incredibly easy to get your hands on heavy-duty painkillers that are considered addictive. As a person’s tolerance to the medication builds, there’s an even greater need for more prescription drugs.
This increased availability of prescription drugs is only adding to the current opioid epidemic.
And you also have to consider the medications used for other purposes.
Many health conditions can be treated or even minimized with a healthy diet, adequate sleep, and exercise. It seems that a lot of Americans want to take shortcuts to cure their conditions with medication rather than putting in hard work and effort.
Why is U.S. healthcare spending so high?
The increase in healthcare spending in America comes down to higher overall costs. That includes hospital and doctor salaries, the cost of prescription drugs, the fees for hospital administration, and the cost of health services.
What percentage of healthcare spending goes to doctors?
It seems that Americans are spending significantly less on physicians and doctors, with decreases ranging between 4.2% and 5.6% in the last several years. This type of spending accounted for nearly $700 billion in 2017 – about 20% of national health expenditures.
Where does the U.S. rank in healthcare?
Unfortunately, not much has changed in the last 30 years when it comes to healthcare investments in America. Despite being a relatively wealthy first world country, America ranked just 27th in the entire world when ranked on both education and health in 2016. The nation trailed countries like Denmark, Finland, and the Netherlands.
These statistics are surprising on just about every front. But most significant is what we can actually infer from these types of statistics.
We can tell that healthcare costs way too much, Americans aren’t going to the doctor as often as they should, and a large percentage of the population is on prescription medication.
But what does that mean for you?
Well, there’s a good chance that as an American, you might be reluctant to make a doctor’s appointment if your finances aren’t in order. And the longer you go without getting medical care, the worse your condition might get.
Not only can an undiagnosed condition make life uncomfortable or even chop years off of your lifespan, but it also has the potential to keep you out of the gym. Add on the fact that some prescription medications play around with your weight and energy levels and you might see your gains slowed or even put to a grinding halt.